Looking back at what the S&P does in the month of December, I don't see a lot of upward movement during this month in previous years. Possible reasons for stagnation include money movement out of Mutual Funds to avoid capital gains taxes, "tax purpose stock sales" in November that can't be rebought until after Jan, cash needed for holiday spending, and so on.

Of course, there is always a "bargain" somewhere.

$cpc and $nyhl weren't confirming the "rally"

Good morning:
Reagrading Bill's comment "...bond yields rise a bit and the $USD to fall before I am really convinced that the initial seven-session rally is sustainable into a two or three month one..."

Does this mean that if the dollar looses value then bond yields are relatively lower and people will want to move to equities for higher yields?

Thanks-still learning.

Hi,

I am trying to make sure that I am understanding certain things.

[BC wrote:
For equities to continue to prosper, the pre-requisite is a healthy credit market. That is not the case today.

Credit markets must be made to work for corporations or else there will be an extended recession, possibly depression.]

1

A week ago I wrote, “Thankfully, the equity market is close to a bottom, and many traders are beginning to see values in prices and that the quality of many corporations has remained intact.”

"...bond yields rise a bit and the $USD to fall before I am really convinced that the initial seven-session rally is sustainable into a two or three month one..."

(i) the equity market rally is not going on forever (unfortunately there will be another test of the lows), ]

Right

[Bill Cara note:

The cycle bottom process in the 2000-2002 Bear market took place over 9 months with a triple bottom. After the first bottom in July there was a substantial bump, and then prices were hammered down again to what traders later saw as the Bear market low in October. Then another major bump until another test of the bottom in March 2003. I think in this cycle, the bottom has been set, but like Oct 2002, there are still serious issues that must be cleared from the table. Ultimately I think the Obama Administration will do that and the stimulus programs will be effective, so that after the Earnings Season of late January into February has passed, and the stimulus programs are seen to be working, the market ought to be like March-April 2003 and be off on a strong Bull run -- moving up a Wall of Worry as economists discuss the recession-based data. As in the summer of 2002, when my strategic perspective turned from Bearish to Bullish, I am in a Bullish mode now. On pull-backs I am writing puts. I fear bonds and love gold, but that doesn't mean it's a one-way street. I'm a trader, looking to exploit the dips and rallies. Not knowing how far gold would rally on Friday, we took profits by closing the short puts. Now we are ready to write puts again -- maybe today, maybe tomorrow. You quoted me here, but you didn't also quote my statement that we must watch prices minute to minute, hour to hour. Seeking Alpha picked up an excerpt from one of my blogs about the gold trade. I was writing about what's happened since I published the Nov 12 Report on GG and the Nov 19 Trade of the Generation. It's now Dec 1 and the gold price dipped about -25, and on the surface somebody would say I had it wrong. A pro trader would say I could not have been more right. That's why I rail at these techies and general business types who say they do the public a service by "rating" people like me. These people wouldn't know a strangle from a necktie. By writing stuff here; all I am trying to do is to get people in the community to think and to talk to one another. Too many people, I gather, are taking this as investment advice when it's not.]